Why Edison Was Wrong

Last night I had an enlightening conversation with Alph Bingham, the co-founder of InnoCentive from Eli Lilly.  This guy is fascinating!

Alph suggested that many people do not like open innovation (external crowd sourcing) because it runs counter to a widely held belief of the R&D community.  Researchers often throw around the Edison quote, “I have not failed 700 times. I have not failed once. I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work.”

Researchers use this quote because it “validates” the iterative development innovation process; the cornerstone of most R&D departments.  They have convinced themselves that they learn as much from their failures as they do from their successes.  Call it what you want, the 700 attempts were failures.

When some R&D people look at open innovation, they see it as linear rather than iterative: post a challenge and get a solution.  This seems inconsistent with their belief in learning from failures.

Alph made the point that in the R&D world, the value of iterative development is overrated.

What if Edison found a solution to the light bulb challenge on the first try?  Would that be bad?  Would he have continued to find the 700 ways that did not work?  Did the 700 failures really add that much value?  Can R&D organizations afford to fail 700 times?  Not in today’s competitive environment.

Alph suggested that open innovation is a massively parallel process where failures and successes happen at the same time.  You post a challenge and you get dozens or hundreds of solutions.  Some won’t work.  But all you need is one solution that does work.  And with open innovation, you only pay only for the solutions that do work.  Failures cost you nothing in terms of time and money.  With internal iterative development, you pay for the successes and the failures.  Do you really learn enough from your failures to justify the extra cost and time involved?

Alph’s perspective is fascinating and I fully agree with him for analytical/deterministic challenges.  Creative challenges and their solutions, on the other hand, often can’t be proven correct until they are tried out in the real world.  Iterative development – via small and scaling experiments – may still be the best approach for solving less deterministic problems.  I call this approach the “build it, try it, fix it” model.  Having said that, the iterations could potentially be staged as a series of open innovation challenges that continue to refine concepts until they are market ready.  This would be a massively parallel iterative creative development.  Very cool.

This got me thinking about a conversation I had with an executive from Chrysler many years ago while I was working at Accenture.  I asked him who he felt his biggest competition would be in the future.  He pointed at me and said, “You.”  Although he was half-joking, it’s true that the role of car manufacturers these days is less about manufacturing and more about integration.  The Accentures of the world are masterful at integration.

And maybe this integration skill is the MOST important skill for your organization to have.

As platforms like InnoCentive continue to grow, problem solving of all types –creative and analytical – will be outsourced in a massive parallel way to a huge network for solvers.  If we take this to an extreme where all challenges are outsourced via crowdsourcing, the role of a company would only be to integrate these solutions together into a seamless offering.

Although this is easier said than done, this one skill may be critical for the survival of your business…and maybe even the US economy.

China and India have a growing base of highly educated engineers and experts.  Eastern European countries and parts of Asia have large creative bases.  The world is truly flat.  And all of these countries have people who are willing to work for pennies on the dollar.

If we try to beat these countries at their game, we will lose.  We could never educate enough people.  And even if we could, our workforce would probably not be willing to labor for lower wages.

Integration is the key.  Yes it is difficult.  And that is good news.  While the rest of the world is focused on the trees (the point solutions to specific challenges), we need to become masterful at defining the forest (the strategy, architecture, and integration of the point solutions).  This is where value is created.  And this is much harder to outsource.

It reminds me of something from my 24/7 Innovation book I wrote back in 2001…

“(As innovators,) we are architects of companies and industries.  An architect is not a ‘reengineer.’ To illustrate this point, I often ask clients what is the difference between an optimist, a pessimist, a reengineering consultant, and an architect. The optimist looks at a half filled glass of water and sees it as half-full. The pessimist looks at the same glass and sees it as half-empty.  The reengineering consultant sees too much glass. Cut off the top. Downsize. An architect looks at the same glass and asks questions such as ‘Who’s thirsty?’ ‘Why water?’ Or ‘Is there another way to satisfy the thirst?’ It is this questioning, challenging and rethinking that differentiates architects from those who rearrange the deck chairs on The Titanic.”

Find solutions everywhere.  Embrace open innovation.  And think like an architect. Ask the difficult questions.  Assess what matters most.  And build a core competency around integrating point solutions.

Remember, we are no longer in the tree business…we are in the forest business.

Are Your Conscious and Unconscious Minds Aligned?

While working on Innovation Personality Poker® over the years, one question has lingered in my mind…

How do we know we are getting the most accurate picture of someone’s personality?

Personality Poker is based on a 75 year old psychological testing technique called a Q-sort.

According to Encyclopedia Britannica, in a Q-sort, “a person is given a set of sentences, phrases, or words (usually presented individually on cards) and is asked to use them to describe himself (as he thinks he is or as he would like to be) or someone else.” In some variations, the cards are sorted from most like the individual to least like them.

If you read academic paper about Q-sorts, you will see that the question arises as to whether or not a self-assessment is accurate. Researchers question if other methods of personality testing are more accurate.  They posit that there are three testing methods…

1. Self-assessment (of the conscious mind)
2. Assessment by a friend, family member, or colleague
3. Assessment by an unbiased 3rd party who is expert in the Q-sort process

Which method is most effective?  It appears that the answer is “all of the above.”  All methods are accurate, depending on the situation.

However, there is a 4th method that is not listed above that may prove even more interesting.

Can our unconscious mind be a better predictor of our personality than our conscious mind?

There are very few methods available to answer this question. Fortunately I was introduced to people at Harvard University who developed a tool called “Implicit Association Testing (IAT).”

Harvard’s website gives a very simple introduction to the concept…

“It is well known that people don’t always ’speak their minds’, and it is suspected that people don’t always ‘know their minds’. Understanding such divergences is important to scientific psychology. This web site presents a method that demonstrates the conscious-unconscious divergences much more convincingly than has been possible with previous methods.”

In short, these tests tell you if your conscious mind (i.e., explicit) is aligned with your unconscious mind (i.e., implicit).

We are about to start work with Harvard that will assess if the conscious mind (tested via the card-based version of Personality Poker) correlates with the results from the unconscious mind (tested via a specially designed Personality Poker IAT).

One of three scenarios will prove to be true:

1. In most people, the conscious mind is perfectly aligned with the unconscious mind
2. In most people, the conscious mind is not aligned with the unconscious mind
3. Alignment between the conscious mind and unconscious mind varies from person to person

If scenario #1 proves to be true, then we will have proven the validity of the Personality Poker at both a conscious and unconscious level.

However, if scenarios #2 or #3 prove to be true, we have a new opportunity…to develop an online IAT-based Personality Poker game that we can make available to the public. In some respects, scenario #3 is most interesting, because it means that in some cases “explicit” personality testing (done via cards, questionnaires, and other diagnostics) is accurate. However in order to get a full picture of one’s personality, “implicit” testing is also required. Only through both types of testing can we get an accurate assessment of one’s total psyche.

In order to better understand Implicit Association Testing, I encourage you to take some of the tests on the Harvard IAT website. This may give you some interesting insights into your own personal biases…some of which you might not want to even admit to yourself.

How To Create a Culture of Innovation

I define innovation as an “organization’s ability to adapt and evolve repeatedly and rapidly to stay one step ahead of the competition.” A culture of innovation, when done right, gives you a competitive edge because it makes you more nimble with an increased ability to sense and respond to change.

A culture of innovation has less to do specifically with new products, new processes, or new ideas. There are of course discrete innovations such as the iPhone or a battery that is powered by viruses (MIT has developed this). These are valuable and necessary in order to create a culture of innovation.

But a culture of innovation is more than new ideas. It needs to be repeatable, predictable, and sustainable.  This only happens when you treat innovation like you treat all other capabilities in your business.  This means having, amongst other things, a defined process.

An organization’s innovation process must achieve three things.  It must:

• focus on the “right” challenges
• find appropriate solutions to those challenges, and
• implement the best solutions.

These translate into three “portfolios” an organization must create:

• A portfolio of challenges
• A portfolio of solutions
• A portfolio of projects

Let’s take each one at a time.

A Portfolio of Challenges

All companies have challenges. They can be technical challenges on how to create a particular chemical compound. They can be marketing challenges on how to best describe your product to increase market share. They can be HR challenges around improving employee engagement.

An organization’s ability to change (i.e., innovate) hinges on its ability to identify and solve challenges. Challenges are sometimes referred to as problems, issues, or opportunities. But at the end of the day, they are all just various forms of challenges. I will use these terms interchangeably here.

Where do you find these challenges? You can find them anywhere – from customers, employees, shareholders, consultants, vendors, competitors, and the list goes on.

Let’s face it, companies have no shortage of challenges.

And guess what, some of the most important challenges to solve are hidden due to organizational blind spots and assumption-making.

The “meta-challenge” for all organizations is to find which challenges, if solved and implemented, will create the greatest value. Given that organizations have limited resources and money, prioritization is critical.

My favorite quote (used many times in this blog) comes from Albert Einstein – “If I had an hour to save the world, I would spend 59 minutes defining the problem and one minute finding solutions.” Most companies spend 60 minutes of their time finding solutions to problems that just don’t matter.

Therefore, the first step in creating a culture of innovation is to surface, identify, and codify challenges. And then you must become masterful at valuing, prioritizing, and framing these challenges.

Think of your innovation portfolio much like you would handle a financial investment portfolio.  You want some safe bets (incremental innovation) and some riskier investments (radical innovation).  You also want a variety of innovations ranging from technical challenges to marketing challenges, and service challanges to performance improvement challenges.

Once you have the right challenges to solve, the next step is to find solutions.

A Portfolio of Solutions

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Innovation Lessons from Around the House

Last night I was hungry and decided to make some tuna fish. I opened my refrigerator and found an 18 ounce squeeze bottle of mayonnaise.  As I started to make my meal, I realized that the mayo had expired 6 months ago. I guess I don’t use it very often because the bottle was still 90% full.

After throwing out my expired food, I realized that there is a lot to learn from things we take for granted around the house.  Here are just three thoughts I had this morning…

Fail Cheaply – Although Costco is one of my favorite stores, I rarely buy perishable items there because I can’t predict how much I will use. Sometimes, as is the case with my mayo, buying the smallest size and paying a premium is better than saving money on larger quantities. Smaller quantities result in less space used, less waste when things don’t work out, and lower costs all around. In business, your best bet is to become masterful at creating small, inexpensive and scalable experiments that give you insights into the real world…not just backroom-based predictions. As you gain new insights and become more confident that a new idea will work (i.e., there is greater predictability), then you can ramp up and go for efficiency.

Sell One, Make One – I debated using a different example for this… One situation no one ever wants to be in is sitting on the toilet and running out of toilet paper. The best solution is to always have a spare roll within reach. When the main roll is finished, the spare role is put into the dispenser, and the backup roll is replaced. This is an example of a simple manufacturing technique called “sell one, make one.”  To avoid running out of product, companies often produce large quantities of inventory. But as we saw in the “fail cheaply” example above, this can lead to waste. Items that don’t sell need to be liquidated at significant discounts. In the meantime, the inventory takes up space and hurts your cash flow. Instead, if you get your manufacturing process (or your innovation implementation process) efficient enough, you can make one immediately after you sell one – that is, when you sell one, you make one. You will never run out if demand never exceeds your ability to manufacture.

Lather Rinse But Don’t Repeat – Shampoo bottles are famous for telling you to lather, rinse, and repeat. I have been doing it every morning without thinking. As an experiment, I tried skipping the repeat step. No difference. I even experimented with using less than one pump of shampoo. Same result. Sometimes we take on wasteful activities because we never through to step back and question them. I reduced shampoo usage by 75% without any impact on my hair. From my experience, most companies can reduce wasteful activities simply by questioning what has always been done in the past.

Here’s something to try. Every day, find something interesting around the house…

• It could be the upside-down ketchup bottle (what took them so long to come up with that idea?).
• It could be the laundry detergent that is super concentrated so you use 75% less liquid, meaning less packaging and easier carrying.
• Or maybe it is the Clorox Disinfecting Wipes that impregnate paper towels with cleaning solution to simplify cleaning.

After selecting your innovation, see how that concept could be applied to your business.  Do not look for ways to apply that specific product.  Instead you want to apply the thought process that was used in developing the product.  For example, with the Clorox wipes, where in your business can you combine two distinct items (products or processes) to create something that is simpler and more efficient.

The purpose is not necessarily to find new ideas (although that would be nice).  Rather it is a great way to exercise your creativity muscle.

Steve Jobs, CEO of Apple Inc, once said, “Creativity is just having enough dots to connect… connect experiences and synthesize new things. The reason creative people are able to do that is that they’ve had more experiences or have thought more about their experiences than other people.”

Or, in my words, creativity is about “collecting and connecting” dots.

This daily exercise will help you become more observant (collecting dots).  And it will help you become masterful at connecting dots.  All of this will help you become more creative every day.

For more on my perspective on creativity, read my article on “Dot Versus Line” thinking

When You Sit on the Fence, You Get Splinters in Your Ass!

During the Q&A section of a presentation of mine on Goal-Free Living, a woman in the audience asked…

“I work in a cubicle in a well known technology firm and I am unhappy. How do I know if it is me or if it is my job? Do I need to change myself or change my job?”

I asked others in the audience for their answer to that question. Most people gave answers that hedged their bet. “Stay at your job while you explore other options,” or “If you are really miserable, find another job quickly and quit this job,” or the most outspoken, “Quit your job now! How could you work another day for the evil empire?”

My answer was a bit different.  I said,  “It doesn’t really matter.”

With the right mindset, every decision is the right decision. If you believe that the path you are on is the right one, then it is. Quitting your job doesn’t change things. You can change jobs all you like, but it won’t matter if you don’t have the right attitude. Conversely you can change your attitude and find new opportunities where you are today, without changing jobs.

We often fail to make progress in life (and business) because we want to wait until we have all of the “answers.”  We want to know all of the facts, look at everything from every angle, and study the details.  In the end, we just sit on the fence.  Instead of answers, maybe what is needed are decisions.

Sadly, many of us suffer from a mild form of  “decidophobia“  – the fear of making decisions.  It is human nature to avoid issues that make us uncomfortable or afraid, and therefore we decide not to decide. Indecision is a no man’s land with no direction and no progress.

Should I change my job?  Should I buy a new house?  Where should I go on vacation?  What should I do with my life?  These all seem like pretty big decisions.  And for most people they are.

We think “Oh, it’s so hard to make these big decisions,” when what’s really hard is the indecision.

In life there are no right or wrong decisions. There are only decisions. When we come to a fork in the road, we tend to overanalyze it. We might say, “I have an opportunity to create this new business venture but . . .” So we end up staying on the same path. Or we may choose a particular path, but then rethink our decision.

One of the reasons we worry so much and wonder whether we are on the right track is that we often see decisions as long term, semi-permanent decisions.

If you are driving your car and you get onto a highway where there are no exits for 300 miles, you had better be certain that you are on the right road. Making the right decision is critical when you don’t have any alternative paths on which to travel. Most people relate to their decisions like hopping onto a road five-years-long with no exits – one road, no options, lots of traffic, and many potholes.

But what if you were on a beautiful winding country road where there are exits every mile, frequent intersections, and a rotary from time to time? What if you had many paths on which to travel, and from which to choose? Then making the right decision becomes less stressful, because you could always change direction. If you drove down a road like this, you would only have to plan to the next fork in the road.

Always move forward. Make decisions.  Movement in any direction is better than stagnation or indecision.

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